Guadagno's denial flies in the face of claims made by Hoboken Mayor Dawn Zimmer, who said Sunday that Guadagno told her to support a redevelopment project backed by Christie or lose Sandy recovery funds.

Zimmer also connected Christie to the threat, saying that Guadagno told her the message was coming directly from Christie.

Appearing on CNN's "State of the Union," Zimmer said, "She said that to me -- is that this is a direct message from the Governor," Zimmer said, referring to Lt. Gov. Kim Guadagno, who Zimmer said approached her in a parking lot in May to deliver the message.

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Who's who in Christie bridge scandal – New Jersey Gov. Chris Christie is embroiled in unfolding controversies over alleged political payback. The primary scandal involves suggestions key aides and supporters orchestrated traffic gridlock around the George Washington Bridge in Fort Lee last year to punish that town's mayor for not endorsing Christie's reelection. A separate controversy involves a federal watchdog's review of whether Christie improperly used Superstorm Sandy funds to produce tourism ads starring him and his family.

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Who's who in Christie bridge scandal – Hoboken Mayor Dawn Zimmer claims New Jersey Lt. Gov. Kim Guadagno approached her in a parking lot last May and told her that Sandy recovery aid for her town depended on her support of a redevelopment project backed by the governor.

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Who's who in the Christie controversies – Lt. Gov. Kim Guadagno denies telling Hoboken Mayor Dawn Zimmer that her town's Superstorm Sandy relief money depended on her support for a redevelopment project proposed by a company with ties to Gov. Chris Christie that he had backed.

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EXPAND GALLERY

The alleged incident happened last May after Guadagno toured a grocery store that had reopened after suffering $10 million in flooding damage from Sandy.

The lieutenant governor recalls having a conversation with Zimmer that day, but says she remembers Zimmer arguing that Sandy recovery aid and redevelopment were the same issue, according to the source close to Guadagno, who was not authorized to speak publicly.

"Kim remembers in their conversation that she was talking about redevelopment and making investments in Hoboken. She remembers Zimmer pressing Kim for money for Sandy. Kim remembers saying you can't tie the two together," the source said. "And she remembers Zimmer continuing to press and showing her a map of the city and pressing for aid for Sandy."

Guadagno remembers it as a "friendly conversation," the source said. "Zimmer was laser-focused on getting Hoboken money for Sandy recovery and that is not the role Kim Guadagno plays in the administration," the source said.

She remembers telling Zimmer that the administration would like to do more to redevelop Hoboken, but she doesn't recall talking to her specifically about The Rockefeller Group project. But the source said Guadagno, a veteran prosecutor and former county sheriff, is still going through her records, preparing for a possible subpoena.

In remarks Monday morning -- at a volunteer event in Union Beach, New Jersey honoring the Martin Luther King Jr. National Day of Service -- Guadagno is expected to make the point that, "My job in the governor's office is to oversee redevelopment and reinvestment in New Jersey," the source said.

In fact, a governor's directive prevents Guadagno from working on the Sandy recovery efforts because she was personally affected by the superstorm -- her home in Monmouth Beach was damaged by the storm, the source said. She was at the Hoboken grocery store in her role as an advocate for the state's business community.

"Kim can't talk about Sandy," the source said. "She can't do it."

And Guadagno twice returned to Hoboken after that May visit -- once spending more than two hours touring farmers' markets with Zimmer -- and the Hoboken mayor never brought up the May conversation or indicated that it had upset her, the source said.

Zimmer's comments Saturday and Sunday are a change from what she told CNN on January 11. She said then that while she wondered whether Sandy aid funds were being withheld because she didn't endorse the governor's re-election, she concluded that "I don't think that's the case."

"I don't think it was retaliation and I don't have any reason to think it's retaliation, but I'm not satisfied with the amount of money I've gotten so far," Zimmer told CNN then. She did not mention her concerns about the redevelopment project.